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Attorney General Eric T. Schneiderman announced a felony indictment today charging Moazzam Ifzal Malik, a.k.a. Mark Malik, 33, of Lahore, Pakistan, with stealing over $250,000 from five investors by fraudulently soliciting them to invest in his purported hedge funds, including Seven Sages Capital, L.P. and Wolf Hedge LLC. Malik is accused of luring investors with false representations that he managed a multi-million dollar hedge fund that would guarantee high returns, and then diverted their monies for his own personal use. If convicted, the defendant faces up to 20 years in prison. He is currently being held on $1 million bond over $1 million cash bail.
“New Yorkers should be able to put trust in their investments, whether with individual brokers or major financial institutions,” said Attorney General Schneiderman. “My office is committed to aggressively investigating and prosecuting complex financial crimes and securities fraud. This case sends a strong message to anyone who attempts to defraud investors in this state: If you commit securities fraud in New York, we will bring you to justice.”
While the current indictment – filed today in New York County Supreme Court – pertains to five victims, according to statements made by the prosecutor at arraignment, the Attorney General’s investigation to date has identified at least a dozen additional individuals who Malik allegedly defrauded, including victims in New York, Florida, Texas, Canada and Switzerland. Prosecutors allege that based on Malik’s false representations, at least seventeen victims invested over $800,000 in Malik’s purported hedge funds, which Malik then diverted for his personal use.
Also according to statements made by the prosecutor at arraignment, Malik allegedly claimed to be the founder, CEO and fund manager of a series of hedge funds from 2009 to present, including Wall Street Creative Partners, L.P., Seven Sages Capital, L.P., American Bridge Investments L.P., and, most recently, Wolf Hedge LLC. Malik allegedly advertised his purported hedge funds on his own website on the internet, and also cold-called investors, enticing them to invest by falsely representing that he had extensive experience on Wall Street and that his funds routinely outperformed the market by over 200%. The purported success of Seven Sages Capital, L.P. and American Bridge Investments L.P. was also listed on financial websites, including Bloomberg and Barclay Hedge. In 2012, Barclay Hedge awarded American Bridge Investments L.P. the “yearly performance award” and ranked the fund as the year’s top performing equity long-short fund with over $100 million in assets.
Malik allegedly promised his victims a partnership interest in his hedge funds, which he claimed held a multi-million dollar portfolio of investments in various high-profile IPO’s and secured bond transactions. Malik is accused of created false offering memoranda and marketing material stating that his hedge fund had over $100 million in assets under management. To further his fraudulent scheme, Malik allegedly issued fabricated account earnings statements to his victims, which indicated that their investments were consistently earning profits. Instead of investing in securities as promised, Malik allegedly diverted investor monies for his own personal use, including $215,000 in cash withdrawals and an additional $210,000 for hotels, airline tickets, rental cars, restaurants, electronics, utilities and even a karaoke bar.
According to his website, Malik “has over a decade of experience on Wall Street in brokerage and in Management” and “used to lead teams to manage assets over USD 5 billion at various alternative asset management firms in New York.” However, according to statements made by the prosecutor at arraignment, the Attorney General’s investigation revealed that Malik’s only financial experience was as a trainee at a New York City financial consulting firm, that Malik was only registered as a broker from 2007 to 2009, and that over the past fifteen years, Malik has been employed as a security guard, waiter, and traffic agent for the New York City Police Department. The Attorney General’s investigation further revealed that Malik’s brokerage account never held more than $90,000.
The Attorney General’s indictment charges Malik with fraudulently soliciting investments from five investors between 2011 and 2015. The defendant is charged with two counts of Grand Larceny in the Second Degree (a Class C felony), three counts of Grand Larceny in the Third Degree (a Class D felony), seventeen counts of Forgery in the Second Degree (a class D felony), five counts of Securities Fraud under the Martin Act (a Class E felony), and one count of Scheme to Defraud in the First Degree (a Class E felony).
Malik was arraigned today on the indictment before Supreme Court Judge Jill Konviser in New York County Supreme Court. The Attorney General’s investigation of Malik continues.
The charges against the defendant are allegations and he is presumed innocent until proven guilty in a court of law.
This indictment is the latest in a series of securities fraud prosecutions brought by the Attorney General’s recently formed Criminal Enforcement and Financial Crimes Bureau. In March 2014, the Bureau arrested Wing K. Lim, a.k.a Kent Lam, owner of Wall Street Investment, LP, on a 31-count indictment filed in New York County, for operating a $4.3 million securities fraud scheme. In November 2014, the Bureau convicted Robert H. Van Zandt on a 33-count indictment filed in Bronx County, for operating a $4.8 million Ponzi Scheme; Van Zandt was sentenced to 3 2/3 to 11 years in prison in January. Also in January, the Bureau charged William Vogt on an 18-count indictment in New York County, for posing as an internationally renowned fashion designer named “Bill Bolland” to lure his victim into making more than $350,000 in investments. And last week, the Bureau filed charges in Westchester County against New Jersey broker Khawaja Saud Masud for stealing over $1 million from a retired pediatrician and his wife by fraudulently soliciting investments in his purported hedge fund, RKS Capital, LP.
The Attorney General’s Criminal Enforcement and Financial Crimes Bureau was created in January 2014 and expands the Attorney General’s former Criminal Prosecutions Bureau. The Bureau focuses on criminal enforcement, including combating complex financial crimes in bank and financial institution fraud, securities and investment fraud, money laundering, tax crimes, mortgage fraud, investment schemes, and insurance fraud. The Bureau also has a Financial Intelligence Section, which pro-actively initiates investigations into illicit financial activities and tracks the flow of suspicious funds by reviewing banking, regulatory, law enforcement, and open-source data to identify trends to enhance the investigation and of financial crime schemes.
The Attorney General thanks the New York Regional Office of the Securities and Exchange Commission, Division of Enforcement, and the Financial Industry Regulatory Authority, Criminal Prosecution Assistance Group, for their assistance in this investigation.
The Attorney General’s investigation was based upon an investor complaint to the Attorney General’s Investor Protection Bureau. Assistant Attorney General Desiree Cummings handled the investor complaint and conducted the initial investigation, which was coordinated with the Securities and Exchange Commission. The Investor Protection Bureau is led by Bureau Chief Chad Johnson and Deputy Bureau Chief Katherine Milgram. The Division of Economic Justice is led by Executive Deputy Attorney General Karla G. Sanchez.
The criminal case is being handled by Assistant Attorney General Shanon N. LaCorte of the Criminal Enforcement and Financial Crimes Bureau, with the assistance of Legal Analyst Natasha Butalia. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Gary T. Fishman and Deputy Bureau Chiefs Stephanie Swenton and Meryl Lutsky. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.
The Attorney General’s investigation was conducted by Investigator Ryan Fannon, Supervising Investigator John Sullivan, and Deputy Chief John McManus, with the assistance of Legal Assistant II Edward Jaffe of the Investor Protection Bureau. Auditor Matthew Croghan worked on the case under Chief Auditor Edward J. Keegan. The Investigations Bureau is led by Chief Dominick Zarrella.
